Ohio House Bill 6 had the kind of year that, if it hadn’t taken place during 2020, might have garnered national headlines and caught the attention of Hollywood.
Before we succumb to the temptation of divulging exploitative details–which include outcries of scandal, bribery, corruption, and racketeering–let’s cover the fundamentals of the bill and what they mean to organizations in the Buckeye State looking to monetize their energy efficiency (EE) projects in 2021 and beyond.
HB 6 was enacted into law on Oct. 19, 2019, and requires all energy efficiency (EE) programs offered by electric utilities in Ohio to end by December 31, 2020.
That utility EE programs are no longer offered in 2021 means any rebate rewards offered by utilities are no longer available to organizations who complete or have completed, EE projects.
But that DOES NOT mean that organizations and EE project developers in Ohio who help the electric grid by permanently reducing electric demand are shut out from earning revenue for their efforts.
When one door closes…
In Ohio, organizations and EE project developers can, with the help of a licensed curtailment service provider (CSP), offer their permanently reduced demand (“negawatts”) into PJM’s capacity market, the Reliability Pricing Model.
Once the reduced load is accepted into the market, the organization will earn revenue from PJM for four years after the project was completed.
To learn more about monetizing energy efficiency projects in PJM in the wake of Ohio House Bill 6’s enactment, click here.
To learn more about the wild ride House Bill 6 had, Google it and pick from any number of vitriol-laced articles that show up on the first page.
Fun as it may be to shine a light on the mudslinging around HB 6, it’s not our place at The Current to feed the political maelstrom. We’re here to inform, so you can make educated energy management decisions.
That said, you might want to make sure you do your reading on HB 6 indoors and away from the windows. There is a lot of lightning out there right now.
What if we told you that a recently completed energy efficiency project could be earning you hundreds to hundreds of thousands of dollars for the next four years in addition to the energy cost savings you are already receiving? Too good to be true? Well … the good news is, it’s not. And we have put together a great panel of energy efficiency experts to help tell you how.
Whether you manage energy for your organization or you provide energy services, this live panel will provide details on how to qualify and enroll projects into the PJM Capacity Program so that you can start earning money for energy efficiency projects. You will learn:
- What types of projects qualify
- How to enroll and participate
- How much you can earn
- Best practices for EE success
- How to maximize the value of the programs
- Common FAQs and live Q&A
Listen, learn, discuss, and start earning from your projects this year.
Submit your question to the Energy Engineer’s Notebook:
Fill out the form below and your question may be the subject of an Energy Engineer’s Notebook episode.
(If your question isn’t selected for an episode, a CPower engineer will get back to you with an answer.)
According to the U.S. Department of Energy, an estimated 20-50% of industrial energy input is lost as waste heat.
Many industrial organizations in the U.S. have learned how to recover waste heat, yet few understand how to monetize it.
Industrial waste heat is the energy generated in an industrial process that is not put to practical use. Waste heat sources include hot combustion gases discharged to the atmosphere, heated products exiting industrial processes, and heat transfer from hot equipment surfaces.
Waste stream recovery involves capturing and reusing waste heat for the purpose of heating or for generating mechanical or electrical work.
Example uses for recovered waste heat include:
- Generating electricity
- Preheating combustion air
- Preheating furnace loads
- Absorption cooling
- Space heating
Types of industrial manufacturers that are good candidates for waste heat recovery include:
Glass Manufacturing–Regenerators and recuperators are the most frequently used systems for waste heat recovery in the glass industry, which collectively consumes approximately 300 TBtu/year.
Cement Manufacturing–The cement industry consumes about 550 TBtu/year with its most energy-intense processes including those which mine and prepare raw materials for the kiln, clinker, production, and cement milling. Options for heat recovery include preheating meal and power generation (cogeneration).
Iron and Steel Manufacturing–Consuming approximately 1,900 TBtu of energy per year, the U.S. iron and steel industries are prime candidates yet face a challenge for executing economically sound heat recovery. While recovery from clean gaseous streams in these industries is common, heat recovery techniques from dirty gaseous streams (from coke ovens, blast furnaces, basic oxygen furnaces, and electric arc furnaces) often incur high capital investment costs.
In several deregulated markets in the U.S.–PJM, for example–recovered waste heat can be monetized by offering the recovered resource into the region’s forward capacity market.
Forward capacity markets like PJM’s Reliable Pricing Model (RPM) allow the grid operator to procure the grid’s required capacity in advance of its delivery day.
Implemented in 2007, PJM’s Reliability Pricing Model uses a market approach to obtain the capacity needed to ensure its grid’s reliability.
The RPM’s market approach includes incentives that stimulate investment in existing generation from traditional sources like power plants while encouraging the development of other resources such as demand response and energy efficiency.
In many cases, organizations that are already participating in waste stream recovery can realize easy earnings akin to found money that requires little work to obtain other than offering the recovered resource into the market.
To learn more about monetizing waste stream recovery and how to offset the rising U.S. energy expenditure share, read CPower’s “Demand-Side Energy Management in the U.S. Manufacturing Industrial Sector: an analysis of revenue-generating strategies.”
Data centers are in demand.
The growth of cloud computing and the subsequent challenge of powering big data has led to a data center construction boom.
A 2018 industry profile by Dun & Bradstreet predicts data center space to grow to 1.94 billion square feet worldwide in 2018. Much of the industry’s new construction aims to continue the trend toward energy-efficient buildings, shedding the label of “comatose power drains” issued by the New York Times in a 2012 article that claimed, “data centers can waste 90% or more of the electricity they pull off the grid.”
Since the early 2000’s, data-hosting organizations have sought to discard their profligate reputation by making their buildings more efficient and (if at all possible) environmentally responsible.
While more efficient than their early 21st century iterations, data centers continue to use a lot of electricity–up to 50 times more than standard office spaces—and subsequently face the high expense of large-scale electricity consumption.
Green data centers–those which are environmentally responsible and resource-efficient–aim to lower costs and create a more sustainable operation through improved design and by using more efficient equipment. According to the London-based research organization Technavio, the green data center market is expected to grow at a compound annual rate of about 15% by 2021.
Data hosting organizations that have upgraded their existing facilities to be more energy efficient may be eligible to earn money for the permanent reduction of their electric demand.
That’s because the data center industry’s recent push toward a more efficient and sustainable future comes at a serendipitous time when energy markets around the country are working to reduce demand via energy efficiency investments and to integrate distributed energy resources (DERs) onto their energy grids in an attempt to diversify their fuel mixes.
Right now and for the foreseeable future, grid operators and electric utilities in each of the nation’s six deregulated energy markets have created a wealth of incentive programs to encourage commercial and industrial organizations to invest in energy efficiency and to monetize their generation capacity.
Energy Efficiency: Earn money for permanently reducing demand
Organizations that have recently upgraded their data center facilities by way of installing high-efficiency HVAC equipment, investing in more energy efficient IT technologies, improving airflow or data management and more may be eligible to earn money for their energy-reducing efforts.
Energy Efficiency (EE) is the permanent reduction of electrical demand through the installation of efficient systems, including improvements or upgrades to building infrastructure, mechanical systems, existing equipment or new devices.
In some energy markets in the US (PJM and New England, for example) organizations can earn money for these permanent reductions in demand by partnering with a licensed demand-side management company who can offer these “negawatts” (capacity from conservation rather than power generation) into the Independent System Operator’s (ISO) forward capacity market.
Many electric utilities offer incentives to organizations that have permanently reduced demand through energy efficiency projects. These opportunities create another revenue stream to either decrease project paybacks or allow for reinvestment for future projects.
Demand Response & DERs: earn money for helping the grid
Most data centers are powered by electricity from the grid, which is susceptible to outages due to the demand for energy outpacing the grid’s ability to supply it.
Data centers can’t afford to be down due to a brownout or blackout for a single second, lest they risk losing their customers forever.
The use of on-site power generation is, therefore, a ubiquitous practice amongst data centers. While primarily seen as a reliability resource of paramount importance, a data center’s generation capacity can also be a revenue-generating asset for organizations that participate in demand-side energy management, particularly demand response.
When the grid is stressed and demand for electricity exceeds supply, the grid operator must work to restore the balance.
Instead of calling for the generation of more energy at great expense to consumers and the environment, the grid operator can offset the imbalance by calling on commercial and industrial organizations to reduce the amount of electricity being consumed from the grid when demand exceeds supply.
That’s demand response–programs that pay organizations to reduce electricity usage during times of grid stress or high energy prices.
For data centers with on-site backup generation, earning money through demand response participation is possible without sacrificing service to customers. That’s because a properly permitted backup generator can play a starring role in an energy curtailment strategy that can lead to significant earnings for data centers.
When selecting a company to guide your demand-side energy management, it’s important to consider the company’s scope of demand-side expertise. Do they serve the markets where your properties reside? Does the company specialize in one type of demand-side energy management, or is it equally skilled in a wide range of energy asset monetization practices?
Most importantly, a demand-side energy management partner should earn your trust in every aspect of the relationship your organizations share.
Demand-side energy management is not a one-size-fits-all exercise. No two buildings are alike and every data center organization is unique in its complexities.
Like your business, your demand-side energy management strategy should evolve and refine over time, forever in pursuit of perfection as energy markets continue to change and your needs as an organization evolve.